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EL DORADO, Ark. — Murphy USA Inc. is “extremely confident” in its independent growth plan and “very well prepared to take this plan” forward, President and CEO Andrew Clyde stated Thursday during the company’s 2015 fourth-quarter earnings call.
As CSNews Online previously reported, Murphy USA announced on Jan. 26 that its long-time partner Wal-Mart Stores Inc. has decided to develop a proprietary gasoline program for its supercenter locations not currently supplied by Murphy USA.
Although multiple media reports alleged Walmart's decision is a blow to Murphy USA going forward, the El Dorado-based convenience store retailer reiterated Thursday that it is excited about its “Plan B,” otherwise known as the independent growth plan.
This plan, according to Clyde, includes opening 60 to 80 new stores this year, including entering three new states: Nebraska, Nevada and Utah.
“The company enters 2016 with strong earnings momentum from our major initiatives, along with the clear focus of our independent growth plan and a sustained commitment to our shareholders,” Clyde said, adding that Murphy USA is a “very strong company with a bright future” and “we are just starting to see the potential of this business.”
2015 was a strong year from the standpoint of new store openings, as the retailer opened 73 new locations, including 44 in the fourth quarter alone.
“We added stores at our fastest pace since 2006,” revealed Clyde.
As of Dec. 31, Murphy USA operated 1,335 c-stores and gas stations in 24 states, comprising 1,111 Murphy USA sites and 224 Murphy Express locations.
MIXED Q4 RESULTS
Regarding earnings, Murphy USA’s fourth-quarter results were mixed. Net income fell by more than $31 million to $66.7 million for the quarter ended Dec. 31. Adjusted EBITDA fell from $160.7 million in 2014’s fourth quarter to $77.3 million a year later. A main reason cited for the decline was the moderation of market conditions in the fuel segment, which enjoyed record earnings late in 2014.
Murphy USA did see its retail fuel gallons rise by 36 million to 1.07 billion gallons sold in the 2015 fourth quarter. However, retail fuel volumes per site dropped by nearly 4 million gallons to 273.4 million gallons, and retail fuel margins came in at 12.4 cents per gallon excluding credit card fees, nearly half the 24.6 cents per gallon achieved in 2014’s fourth quarter.
Although the forecourt struggled when comparing year over year, Murphy USA saw strength in its in-store sales. Total merchandise sales rose 6.7 percent in 2015’s fourth quarter, driven both by new store openings and a 2.6-percent improvement in same-store sales growth. Merchandise margins on a same-store basis improved by 1.6 percent year over year.
Tobacco sales were the only spot of weakness, with contribution from this category declining by a total of 2.9 percent, or 1.2 percent on a same-store basis.
Total merchandise sales increased by $36 million year over year to $586 million, while total merchandise contribution came in at $83.9 million, an advance of $4.9 million.
Breaking down the chain's in-store performance further, Murphy USA highlighted that beverage sales were especially strong as they benefited from the retailer's buildout of larger-format convenience stores, enhanced product mix and promotions, and refresh/super-cooler improvements.